Starbucks Design Brief

Transcription

1 Starbucks Design Brief November 4, 2010 Benjamin Gadbaw Christopher Cannon Cooper Smith Tina Ye

2 Starbucks represents something beyond a cup of coffee. HOWARD SCHULTZ

3 In 2009, Americans drank 146 billion cups of coffee

4 In 2009, Americans drank 146 billion cups of coffee (That s $40 billion in sales)

5 = 1 BILLION CUPS OF COFFEE

6 = 1 BILLION CUPS OF COFFEE

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8 Home Coffee Sales: $6.3 billion ($915 million in specialty coffee sales)

9 VIA US Instant Coffee: 5% market share ($100M first ten months. Estimated $1B by 2015)

10 Competitor Revenues (in billions) 25 McDonalds Starbucks Dunkin Donuts

11 McDonald s Latte: (40 less than Starbucks)

12 $6.9 billion yearly sales: (servs 30 cups of coffee every second)

13 Starbucks Response: 30,000 economy coffee outlets (supermarkets, Burger King, Subway, AMC theater)

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15 The Third Wave: +70% specialty coffee houses in 5 years (that s one coffee house for every 14,000 Americans)

16 The battle within the company is making sure growth doesn t dilute our culture. HOWARD SCHULTZ

17 Market Saturation: 900 Starbucks store closures in 2009 (within the United States alone)

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20 Strengths Starbucks is the market leader in the coffee industry Product diversification It has 16,635 stores in 40 countries worldwide including 11,068 stores in the United States Company operated retail stores, (licensees, no franchises) Customer service is excellent Customers are satisfied with the quality and taste of coffee High brand awareness and equity Approx 13,000 valued and motivated employees, good work environment Financial conditions of the company are good Starbucks coffee shops locations are at convenient places like library, shopping malls and etc. Starbucks making their business more environmental friendly Customer base loyalty Good relationships with suppliers Product is the last socially accepted addiction

21 Starbucks seeks to be an authentic coffee experience that conveyed the artistry of espresso making, a place to think and imagine, a spot where people could gather and talk over a great cup of coffee, a comforting refuge that provided a sense of community, a third place for people to congregate beyond work or the home, a place that welcomed people and rewarded them for coming, and a layout that could accommodate both fast service and quiet moments. HOWARD SCHULTZ

22 Starbucks Primo

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27 Starbucks Roasting Plants Kent, WA Portland, OR Minden, NV York, PA Columbia, SC

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35 Store Conversion Budget Conversion to a Starbucks Primo will share many similarities with opening up a new store. The biggest expenses will be: Retraining or rehiring staff Redesign & remodeling of store Acquisition of furnishings and decor Acquisition of supplies & stock (complementary food items, coffee, liquors) Administrative and infrastructure changes

36 New store in 1995: $350,000 x 44% inflation rate New store in 2010: $504,000

37 Cost of implementing a Starbucks Primo: $400,000

38 Implementation time per store: 3 months Foregone revenue: $250,000

39 Total cost of implementation per store is $650,000

40 1,000-1,500 square feet

41 1,000-1,500 square feet seats

42 1,000-1,500 square feet seats x 5 hours

43 1,000-1,500 square feet seats x 5 hours = people a night

44 1,000-1,500 square feet seats x 5 hours = people a night x $15/person

45 What does $15 look like? 5-cup Coffee-Tasting Flight: $18... paired with dessert offerings: $25 A single specialty coffee drink paired with a single dessert offering: $11 $20 A couple alcoholic coffee drinks: $12 $18

46 1,000-1,500 square feet seats x 5 hours = people a night x $15/person = $3,375-$5,250 per day x 365 days = $1.3 million $2 million a year

47 Projected Revenues (per store) $2M (1,500 Sq. Ft. Stores) $1.3M (1,000 Sq. Ft. Stores) $930,000 Average Store Revenue (2009) Projected one-year revenue

48 Starbucks Primo... Starbucks... Seattle s Best... Via

49 (Starbucks) Circadia

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54 Positioning HIGH-END Stumptown Nespresso 15th Ave Local Cafés Peets Coffee Starbucks INDEPENDANT CHAIN Seattle s Best Neighborhood Corner Stores Dunkin Donuts McDonalds LOW-END

55 Positioning HIGH-END Local Cafés Stumptown 15th Ave Starbucks Primo Peets Coffee Nespresso Starbucks Starbucks INDEPENDANT CHAIN Seattle s Best Neighborhood Corner Stores Dunkin Donuts McDonalds LOW-END

56 Monday Friday WAKE GET TO WORK LUNCH SLEEP Weekend WAKE LUNCH SLEEP

57 = 1 BILLION CUPS OF COFFEE

58 Long Term Benefits Increased visibility Increased respect among the coffee-drinking elite Strengthened brand equity

59 Thank you.